General Motors Faces Electric Vehicle Reckoning Amid Strong Financial Performance

The American automotive titan General Motors finds itself navigating turbulent waters in its electric vehicle division, creating a complex investment narrative. Despite posting impressive quarterly earnings that would typically propel the stock to new heights, unexpectedly sluggish EV demand has forced a strategic pivot. The critical question for investors is whether GM can successfully execute this course correction or faces prolonged challenges in its electrification efforts.

GM's third-quarter 2025 performance exceeded market expectations, delivering adjusted earnings of $2.80 per share compared to the projected $2.32. Revenue climbed to $48.59 billion, with the Middle East region showing particular strength at 28% year-over-year growth. This robust performance in traditional combustion engine operations now serves as the financial backbone supporting the company through its electric vehicle difficulties.

Market analysts maintain generally favorable outlooks on the stock despite recent setbacks. The average price target sits around $70, with Barclays and Tigress Financial expressing even greater optimism at $85 and $92 respectively. Institutional investors display mixed positioning—some reducing exposure while others view the current weakness as an accumulation opportunity.

Battery Production Pause Signals Deeper Challenges

The centerpiece of GM's electric offensive faces significant strain. Ultium Cells, the joint venture with LG Energy Solution, will temporarily lay off 1,334 employees at its Lordstown facility beginning January 2026. This drastic measure follows previously announced workforce reductions at other locations and underscores the severity of the situation. Production across three Ultium battery plants will remain suspended until mid-2026, clearly indicating that ambitious electric plans have been shelved temporarily.

Should investors sell immediately? Or is it worth buying General Motors?

Underlying this strategic shift lies a sobering market reality: Recent AAA survey data reveals that over 60% of American drivers now express reluctance toward purchasing fully electric vehicles—the highest resistance level recorded since 2022. GM already acknowledged this trend in its third-quarter results, taking a $1.6 billion impairment charge partly attributable to reduced government incentives.

Strategic Partnerships Undergo Transformation

In another symbolically significant move, GM will conclude its decades-long partnership with Allison Transmission. Starting December 2025, heavy-duty GM trucks will no longer carry the Allison branding. While the mechanical components of the 10-speed automatic transmissions remain unchanged—as they were already GM proprietary designs—the removal of this established brand name may unsettle traditional truck buyers.

Critical Juncture Approaches in Early 2026

January 2026 emerges as a pivotal moment for General Motors. The company will not only report quarterly earnings but must also demonstrate how its strategic realignment is translating to financial performance. The 2025 earnings guidance range of $9.75 to $10.50 per share appears ambitious—can the automotive giant deliver these results despite the electric vehicle slowdown?

The coming months will test whether GM's strong conventional automotive business can sufficiently offset electric vehicle challenges while the company recalibrates its electrification strategy for current market realities.